A union representing most of the state of Alaska’s employees is suing the administration of Gov. Mike Dunleavy over its decision to delay the release of a study that was meant to determine whether state employees are adequately compensated.
The Alaska Legislature approved funding for the study in 2023, in effort to address the state’s challenges in recruiting and retaining employees. The study was set to be completed in June of last year, giving lawmakers and unions enough time to review its results and incorporate them into the coming budget cycle.
Instead, Dunleavy’s office delayed the release of the results by nine months, citing the need for additional data, to the end of March.
In a lawsuit filed Tuesday, the Alaska State Employees Association, a union representing roughly 8,000 of the state’s 14,000 workers, alleges that the Dunleavy administration “quietly rejected” the salary study and refused to release it, “knowing that it would have to substantially increase salaries of state employees across the board.” The lawsuit further alleges that the Dunleavy administration proceeded to repeatedly delay the release of the study, and ultimately requested an altogether new study based on different benchmarks than those approved by lawmakers.
Spokespeople for Dunleavy deferred all questions on the lawsuit to the Department of Law and declined an interview request. The Department of Law did not immediately respond to a request for comment on the litigation.
The study, as originally approved by the Legislature, was meant to compare Alaska’s compensation to the 65th percentile of equivalent jobs — meaning that the state sought to pay better than 65% employers for equivalent positions.
But in an August amendment to the contract, the administration requested the private contractor conducting the study to instead compare the state to the 50th percentile for some job classifications. Under the amendment, only jobs related to “life, health and safety” would be compared to the 65th percentile.
The Dunleavy administration has so far released only redacted versions of the amendment to the public, obscuring the change from the 65th to the 50th percentile as the benchmark. The union included the unredacted version of the amendment in its court filing. It did not say how it obtained the document.
ASEA executive director Heidi Drygas said the state has aligned its compensation with the 65th percentile for at least two decades. Deviation from that practice, she said, would go against the goal of the study by weakening the state’s ability to recruit and keep qualified workers.
“It’s a huge difference in terms of take-home salary for someone,” said Drygas. “This was not something that the administration came to us and told us about. They did this very quietly, very surreptitiously.”
The website of the Alaska Department of Administration stated earlier this month that the state’s policy is “to target overall market competitiveness at the 65th percentile (the median and point at which 35% of employers pay higher salaries and 65% pay lower salaries than the State).” The webpage has since been removed.
The lawsuit alleges that Segal, the private contractor, completed the study as originally requested using the 65th percentile as the benchmark, finding that “the majority of state salaries are ‘misaligned,’ meaning they vary from the 65th percentile of the relevant market by 10-15% or more.”
The move by the Dunleavy administration to delay the salary study and amend its benchmark for comparison came as ASEA began to negotiate a new three-year contract with the state in the fall of last year. That new contract is due to lawmakers by the middle of next month, before the new version of the salary study is set to be released.
The union said it requested the earlier versions of the salary study to incorporate its findings into the negotiation process, but the administration deemed the earlier findings confidential and refused to release them.
During a hearing held by the House State Affairs Committee last month, officials with the Department of Administration did not mention that the benchmark in the study had been altered. They said that the study was delayed because lawmakers last year had approved significant pay raises for several job classifications that were not incorporated into earlier versions of the study.
In its complaint, the union is asking a judge to make earlier versions of the study public by overruling the administration’s determination that those documents are exempt from the state’s public records laws.
“The more than 8,000 state employees represented by ASEA, as well as thousands of other state employees, have an interest in having their salaries set fairly,” the complaint states.
Drygas said it wouldn’t be enough for the union to see the new salary study that is expected to be released at the end of March. She said she wanted to see “the original” study as conducted with the 65th percentile benchmark.
“The administration is attempting to manipulate, to bend the study to its will, and to bend the study to its own chosen narrative, and that’s not what the public is paying for,” said Drygas.
The union is also alleging that in its effort to change the benchmark for the salary study and delay its release, Dunleavy violated the Alaska Constitution, which gives the Legislature the power to appropriate funds and does not allow the governor to “divert funds for a use the legislature did not approve.”
The union alleged that because the state had relied on the 65th percentile for so long, it qualified as a state regulation and therefore could not be changed by the Dunleavy administration without public input.
But even if the study becomes public, lawmakers have said it would be difficult to incorporate significant funding increases for state employees — which could amounts to tens of millions of dollars — given the state’s tight finances and a lack of interest in exploring new revenue measures.
“What’s the price tag going to be?” said House Speaker Bryce Edgmon. “Without being able to see the study, we won’t have the lead time to be able to address it, and it’s very concerning.”
Drygas pointed to high vacancy rates in certain state positions — 16% of state positions are currently vacant — that have impacted a variety of services from road maintenance to resource development permits to processing food assistance requests.
“This is not an environment where we can mess around when it comes to providing livable salaries for employees,” she said.